The Scranton School District has 19 days to erase a nearly $19 million budget deficit. With a balanced budget due by the end of the year, the district could announce program cuts and layoffs by the end of the week.
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A 22-year-old Scranton man whom police charged with setting fire to his downtown apartment and driving more than 100 people from their homes Sunday admitted to investigators he did it because he wanted to move
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If the state takes control of the Scranton School District, dozens of teachers could lose their jobs and schools could close. The region also could see devastating effects, including population loss and the relocation of businesses, local leaders say. With much uncertainty about the district’s future, its poor financial health already may be having a negative effect on the region.

“It’s a major impact on the city,” said Scranton Mayor Bill Courtright. “In all honesty, when a lot of people move to Scranton, that’s one of the things they look at. I hope they’re able to solve the problems.”

The state placed the district on financial watch status in June — the first in a series of steps that eventually could lead to state control. Under receivership, the state could close schools or eliminate positions, with little input from local officials.

As the district prepares to present its preliminary 2018 budget later this month, officials search for way to eliminate a projected $25 million gap. The general fund deficit is expected to reach $40 million by the end of the year. Balancing the 2018 budget likely will include layoffs and program cuts. A contract agreement with the maintenance and clerical union — which still must be approved by the board — would eliminate 23 positions immediately. Teachers could also see their jobs cut for the 2018-19 school year.

“In order for our students and our community to have opportunities, Scranton must be successful,” said Michael Mahon, Ph.D., Abington Heights superintendent. “Great school systems are a prerequisite for a successful broader community. To have a strong community and strong city, you need a strong school district. To the extent Scranton is alive and well, the region is alive and well.”

“From a real estate perspective, a school district can be one of the biggest draws for a family to relocate or even to stay,” said Wayne Evans, a Scranton city councilman who owns his own real estate firm. “They may have strong concerns with financial solvency with the school district. That’s a real problem... There are different reasons for people moving, but having a black cloud of financial issues is something people have to consider.”

Pat Rogan, another Scranton city councilman who also works as a real estate agent, said hearing people’s concerns about whether their children will get a good education in Scranton is not new.

“If people don’t think their kids are going to get a quality education, they’re not going to live in the city,” he said.

“I always felt a school district has to be strong in order to bring more people into the city,” she said. “The first thing people ask about is the school system. The school district is a driver of the success of the city. I want to be part of making that happen.”

Seeking help

The city and school district soon may form a committee to discuss sharing services. While some union issues likely would need to be resolved, the city possibly could pick up the district’s trash, instead of the district having its own garbage truck and crew, Rogan said. The city’s department of public works also has mechanics who could work on district vehicles for less than what private businesses would charge, he said.

Last month, state Auditor General Eugene DePasquale issued a scathing report, claiming the district budgeted recklessly, gave health insurance to nonemployees, paid unapproved rate increases to its no-bid bus contractor and provided questionable payouts to former employees. For 12 years, Daniel Sansky and his wife received medical and dental benefits through the district. Sansky, who owns Danny’s Auto Service on West Elm Street, routinely worked on district vehicles, getting paid $672,321 between 2010 and 2016, according to the audit.

Courtright said the district and city possibly could do joint purchasing.

“We’ve worked so hard for these last four years to get our finances in order,” he said. “They’re going to have to make some tough decisions. I wouldn’t want to see the state come in because that gives a black eye to the community.”

Under the leadership of the mayor, who voters elected to a second term last week, the city has worked to exit financially distressed status through several means, including selling the sewer authority and parking garages.

The Greater Scranton Chamber of Commerce is also willing to work with the district, said Bob Durkin, chamber president. Four years ago, the chamber paid for financial consultant Henry Amoroso to work with the city.

“We need to make sure students are getting the education they need,” Durkin said.

While the district is limited to how much it can raise property taxes without applying for exceptions, it is unclear how taxes could be affected if the state takes control. The district could raise taxes by a maximum of 3.6 percent for next year.

“How do you expand the tax base when taxes are so onerous?” Durkin asked. “If there’s one thing the business community needs, it’s certainty when we’re trying to bring businesses into the city and help businesses stay in the city.”

Many businesses recently relocated to the downtown.

“I’d hate to see something as uncertain as the school district’s future turn that around,” Durkin said. “The city is taking on the political will that is necessary to do it. That’s what we need from the school district. The alternative is someone else will be making decisions for us.”

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